US Adds 171K Jobs; Unemployment Rate Rises to 7.9%

U.S. companies beat analysts' expectations last month, hiring 171 thousand workers in October. The Labor Department also revised job numbers higher for August and September - adding 84,000 more workers to company payrolls. Even as employers ramped up hiring, however, the nation's unemployment rate was rising - up one tenth of one percent.

The last major economic report before Americans head to the polls shows hiring accelerated in October. That's welcome news for more than 12 million unemployed Americans, and for a president fighting to keep his job. President Barack Obama told supporters in Ohio that since July the private sector has added more than 170,000 jobs each month.

"And today our businesses have created nearly 5 1/2 million new jobs. And this morning we learned that companies hired more workers in October than at any time in the last eight months," said Obama.

But the improving outlook is just one aspect of the government report. Despite upward revisions to job numbers in August and September, the nation's unemployment rate inched higher to 7.9 percent as more people started looking for work.

Republican challenger Mitt Romney said the report was further proof of an economy at a virtual standstill. He accused the president of falling short on his promises.

"He said he was going to lower the unemployment rate, down to 5.2 percent right now. Today we learned that it's actually 7.9 percent. And that's 9 million jobs short of what he promised," said Romney.

Since World War II, no U.S. president has ever won re-election with unemployment above 7.4 percent. The White House says the new report, though, is further evidence that the economy is healing from the worst downturn in decades. Still, the latest job numbers are unlikely to sway voters.

ABC News political analyst Matthew Dowd said most Americans already have made up their minds.

"The perceptions of the economy are already baked in [already set]. At this point in the game, the last six months of what's happened - in the last six months in the economy - are baked into perceptions," said Dowd.

Despite the better-than-expected job numbers, lingering signs of economic weakness remain. Average hourly pay declined in October, and paychecks have not kept pace with inflation.

After an initial bounce on Wall Street, stock futures fell more than one percent, as investors worried about a deepening recession in Europe and a looming budget crisis in the U.S.